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Iraqi forces try to seal off Islamic State around Tikrit

By Ahmed Rasheed and Dominic Evans

BAGHDAD (Reuters) - Thousands of Iraqi soldiers and Shi'ite militiamen sought to seal off Islamic State fighters in Tikrit and nearby towns on Tuesday, the second day of Iraq's biggest offensive yet against a stronghold of the Sunni militants.

Iranian military commander Qassem Soleimani, who has helped coordinate Baghdad's counter-attacks against Islamic State since it seized much of northern Iraq in June, was overseeing at least part of the operation, witnesses told Reuters.

His presence on the frontline highlights neighbouring Iran's influence over the Shi'ite fighters who have been key to containing the militants in Iraq.

In contrast, the U.S.-led air coalition which has been attacking Islamic State across Iraq and Syria has not played a role in Tikrit. U.S. Defence Secretary Ash Carter acknowledged to Congress that he was concerned about the risk that the operation could inflame sectarian tensions.

"Sectarianism is what brought us to the point where we are. So I do look at it with concern," Carter said.

Iraqi military officials said security forces backed by the Shi'ite militia known as Hashid Shaabi (Popular Mobilisation) were advancing gradually, their progress slowed by roadside bombs and snipers.

They have yet to enter Tikrit, the hometown of executed former president Saddam Hussein, or the nearby Tigris river town of al-Dour, which officials describe as a major centre for the Islamic State fighters.

On the southern flank of the offensive, army and police officials said government forces had surrounded and sealed off al-Dour, but had not yet launched an assault on the town, a source in military operations command said.

To the north, they captured a village close to Tikrit, the army said.

Soleimani, head of the Iranian Revolutionary Guards Quds Force, was directing operations on the eastern flank from a village about 55 km (35 miles) from Tikrit called Albu Rayash, captured from Islamic State two days ago.

With him were two Iraqi Shi'ite paramilitary leaders: the leader of the Hashid Shaabi, Abu Mahdi al-Mohandis, and Hadi al-Amiri who leads the Badr Organisation, a powerful Shi'ite militia.

"(Soleimani) was standing on top of a hill pointing with his hands towards the areas where Islamic State are still operating," said a witness who was accompanying security forces near Albu Rayash.

U.S. WATCHING REMOTELYU.S. General Lloyd Austin, who oversees U.S. forces in the Middle East, said his military was not coordinating with Tehran and was monitoring Iran's activities through intelligence.

"We have very good intelligence services and we have good overhead imagery ... So the activity in Tikrit was no surprise," Austin, commander of the U.S. military's Central Command, told a hearing in Congress.

Austin also emphasized the impact of U.S.-led strikes, estimating that more than 8,500 Islamic State fighters had been killed since the start of U.S.-led coalition bombings in Iraq in August, which were later expanded into neighbouring Syria.

Islamic State fighters have staged several suicide bomb attacks against the army and militia in recent days. Twitter accounts linked to Islamic State supporters named one as Abu Daoud al-Amriki (American), suggesting he was a U.S. citizen, saying he had detonated a vehicle packed with explosives.

The offensive is the biggest in the Salahuddin region north of Baghdad since last summer, when Islamic State killed hundreds of Iraqi army soldiers who had abandoned their base at Camp Speicher outside Tikrit.

Several Shi'ite Hashid Shaabi fighters have described this week's campaign - which has been given the title "Here I am, Messenger of God" - as revenge for the Speicher killings. Prime Minister Haider al-Abadi has urged them to protect civilians in Salahuddin, a mainly Sunni Muslim province.

The drive follows several failed attempts to push the militants out of Tikrit. Since Islamic State declared a caliphate last year in territories under its control in Iraq and Syria, Iraqi forces have not managed to recapture and control a single city.

But months of the U.S.-led air strikes, backed up by the Shi'ite militias, Kurdish peshmerga fighters and Iraqi soldiers, have contained Islamic State in Iraq and pushed it back from around Baghdad, the Kurdish north, and the eastern province of Diyala.

The Tikrit battle will have a major impact on plans to move further north and recapture Mosul, the largest city under Islamic State rule.

If the offensive stalls, it will complicate and delay a move on Mosul. A quick victory would give Baghdad momentum, but any retribution against local Sunnis would imperil efforts to win over Mosul's mainly Sunni population.

(Additional reporting by Saif Hameed in Baghdad, Isabel Coles in Arbil and Phil Stewart and David Alexander in Washington; Editing by Mark Trevelyan, David Stamp and Cynthia Osterman)